Say, at 7/1/15, I was granted 100 RSU from eBay and 30 was sold for tax withholding. I had 70 left and by 7/15, eBay and Paypal are split into two company so my RSU become 70 (new) ebay and 70 (new) Paypal. It seems that Turbotax would mis-calculated my RSU earning in my W2. What is the right way to enter RSU information into Turbotax if the RSU was granted before the split.
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You really don't need to use the RSU step by step process if you know your basis in the stock - which I'd think you do - and if your employer reported the compensation income associated with the vesting on your W-2, which I'm sure eBay did. Too, I don't know what mistake you made in the RSU step by step process. Many people find that interview confusing and mistakes are common.
Actually, now that I think about it, it's impossible to correctly enter this transaction using the RSU step by step process unless you also included a zero-share "sale" of the PayPal stock.
To go back to that 100 share example, let's say that eBay was trading that day - pre-split - at $45 per share, and that's the number eBay used to calculate the compensation. That same $45 per share figure is your basis in your shares. On 7/15 eBay and PayPal split, so now you need to allocate that $45 per share between your eBay stock and your new PayPal stock. A commonly accepted split is
0.607294 PayPal
0.392706 Ebay
so now your per share basis in eBay is $17.67 and your per share basis in PayPal is $27.33.
At this point using the spreadsheet-like "fill in the boxes" default TurboTax entry form you'd enter the sale exactly as it reads. Since the 1099-B almost certainly reports $0 as your basis at this point you've over-stated your income. To correct that
Tick the box next to "This sale involves an employee stock plan (including ESPP) or an uncommon situation."
Click the blue "Start Now" button that shows up and then click the radio button next to "My 1099-B has info I know isn't right, or it has extra info I need to add."
That will allow you to add the missing amount of basis (70 x $17.67) and TurboTax will show all this correctly on Form 8949.
Tom Young
You really don't need to use the RSU step by step process if you know your basis in the stock - which I'd think you do - and if your employer reported the compensation income associated with the vesting on your W-2, which I'm sure eBay did. Too, I don't know what mistake you made in the RSU step by step process. Many people find that interview confusing and mistakes are common.
Actually, now that I think about it, it's impossible to correctly enter this transaction using the RSU step by step process unless you also included a zero-share "sale" of the PayPal stock.
To go back to that 100 share example, let's say that eBay was trading that day - pre-split - at $45 per share, and that's the number eBay used to calculate the compensation. That same $45 per share figure is your basis in your shares. On 7/15 eBay and PayPal split, so now you need to allocate that $45 per share between your eBay stock and your new PayPal stock. A commonly accepted split is
0.607294 PayPal
0.392706 Ebay
so now your per share basis in eBay is $17.67 and your per share basis in PayPal is $27.33.
At this point using the spreadsheet-like "fill in the boxes" default TurboTax entry form you'd enter the sale exactly as it reads. Since the 1099-B almost certainly reports $0 as your basis at this point you've over-stated your income. To correct that
Tick the box next to "This sale involves an employee stock plan (including ESPP) or an uncommon situation."
Click the blue "Start Now" button that shows up and then click the radio button next to "My 1099-B has info I know isn't right, or it has extra info I need to add."
That will allow you to add the missing amount of basis (70 x $17.67) and TurboTax will show all this correctly on Form 8949.
Tom Young
Link to files.shareholder.com now no longer exists. By Googling, I found this one: https://investor.paypal-corp.com/static-files/0800c939-9349-48d6-865a-8603894a8708
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